Fearing the loan
Students and parents looking to fill the gaps between financial aid awards and the costs of college often apply for loans with the same level of zeal that they put into admissions applications in the first place. In that driving desire to finance higher education, borrowers are at risk of making costly mistakes. Here are the top five mistakes people make when applying for student loans -- and tips on how to avoid them.
"Borrowing some reasonable amount to help finance your college education is overall a good thing," explains Jonathan Burdick, dean of admissions and financial aid at the University of Rochester in New York. "It's a smart investment because you're increasing your long-term earning power."
Despite the increasing costs, a college education is still statistically a smart financial move. A 2014 study by Pew Research Center found that college graduates age 25 to 32 who are employed full time earn approximately $17,500 more per year than their peers who didn't graduate from college. In addition, their overall job satisfaction is higher and their unemployment rate is much lower.
"Wise borrowing at a reasonable level in order to attend the college where you feel most likely to succeed is better than avoiding all risk," Burdick adds.